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Leveraging Digital Technology to Create a More Resilient Supply Chain

supply chain

Leveraging Digital Technology to Create a More Resilient Supply Chain

The ongoing COVID-19 pandemic has disrupted the flow of goods across the globe, from raw materials to finished products. The pandemic has raised awareness of the importance of truck drivers, delivery drivers and warehouse workers who have kept products moving in this challenging environment. The economic ramifications have forced companies and industries to reevaluate their supply chains.

Additionally, the pandemic has vividly illustrated that today’s highly interlinked, international supply chains have more potential points of failure and less flexibility for absorbing delays and disruptions than business leaders may have realized.

To build more resilient and flexible supply chains, companies may consider several options, including bringing some critical activities closer to home, setting up backup suppliers to reduce exposure to any single supplier/country, or refining their inventory strategies. Of course, any such alteration will affect logistics and transportation.

Having the right combination of technology, expertise, people, and solutions in place is critical as companies revisit their supply chain strategies. Fortunately, leveraging supply chain technology can improve end-to-end visibility, resiliency, and efficiency within your supplier networks.

Advances in digital technology and automation are driving the continued evolution of supply chains. Some of the most impactful technologies can be grouped into three buckets:

Automation

-Robotic Process Automation (RPA)
-Configurable workflows

 

Digitization

-Artificial intelligence
-Machine learning
-Cloud computing

 

Big data

-Internet of Things

 

Companies in many industries currently employ these technologies. GlobalTranz uses these technology advances to enable and support our people.  We have used RPA to streamline many rote, operational tasks and allow our workforce to tackle more strategic, higher-value activities, particularly those which build relationships with our customers, suppliers, and partners. RPA creates a software robot leveraging a specific set of rules to automate tasks, such as document retrieval, inter-system data entry, approval processes, and gathering track and trace data. Unlike traditional custom-developed solutions, RPA can be continuously modified in a more real-time approach – especially important as the number of data sources and the sheer amount of data continues to increase.

By contextualizing data and reviewing daily processes, businesses can make complex and time-consuming processes more efficient. For example, when using RPA to gather track and trace data, you can be assured that the information is the most recent and accurate.

Before building bots to automate the collection of track-and-trace information, GlobalTranz devoted nearly 139 days’ worth of time annually, per person, to this task. Automation has enabled people to spend more time with customers and partners helping them devise strategies to address challenges brought on by COVID-19 and create a more resilient supply chain.

As companies look ahead to the economic recovery, it is imperative that they obtain greater visibility into their own facilities, their direct suppliers, and logistics partners. The crisis demonstrates the need for resiliency and accurate, real-time information that can help businesses make better-informed decisions and mitigate the costs of supply chain disruptions.

Obtaining accurate, real-time information to mitigate complexity and create resiliency requires a more digitized approach. Disruptive risks require investment in additional supply chain resilience even though the gains and the return on investment may not be immediate.

Successful organizational change, much like social change, can be influenced by the people and capabilities around us – including both stakeholders within your business and your supply chain partners – as well as how internal data and external intelligence are leveraged to make better business decisions.

industries

Most Affected Industries By US-China Trade War

Since Donald Trump became president, the US and Chinese governments have been at loggerheads after the Trump administration started imposing hiked tariffs on goods coming from China. This came hot on the heels of a trade deal that the two governments had been negotiating on, a deal that was supposed to strengthen trade between the two global economic powerhouses. Hundreds of billions of dollars’ worth of Chinese goods are now being tariffed at 25%, up from 10%. China is threatening to come up with stringent countermeasures, which threatens to precipitate a full-blown trade war.

Trade experts are predicting that American companies that import goods from China will be paying unreasonably hefty taxes to their government by 2020. That could cripple their operations.

This trade tension has precipitated many harsh and far-reaching consequences. Manufacturers and importers in the US are now cutting costs, postponing key business deals, and putting off investments in a bid to cushion the business-crippling impact of the trade wars. Moody’s Analytics- an American economic research firm- estimates that this has already cost 300,000 Americans their jobs and if things don’t change for the better, more than 450,000 job opportunities will have been quashed by the end of 2019. This impact is being felt across industries, although some industries have been affected more than others. Here are some of these industries:

The Energy Sector

Steel and aluminum are very important to America’s energy sector. They are used to construct oil pipelines, to build solar panels, to distribute electric power- you name it! President Trump has proposed an additional tax on aluminum and steel imports from China, which has already caused the country’s energy PD to hike significantly. Projects in the energy sector will keep getting pricier, which in turn will force consumers to pay higher prices for clean energy. If the price gets out of hand, there is a serious danger of many Americans ditching the expensive clean energy for the cheaper dirty energy.

Automobiles

American automakers sell most of their products in the Chinese market. In 2018, as a countermeasure, the Chinese government raised tariffs from 15% to 40% for all automobiles entering its market from the US. This hasn’t affected the Chinese so much, bearing in mind that the Asian nation has a thriving automobile sector that can satisfy the local market.

On the other hand, American electric automakers including Tesla Inc. (TSLA) will be feeling the pinch in the long run if the China-US trade tension deteriorates. Auto parts sellers will also stand to lose if the situation won’t improve. That being said, things are looking up for this industry as the Chinese government promised to suspend the tariffs as an act of goodwill. If the US could return the gesture, fortunes are likely to turn in favor of American automakers.

Translation Industry

Digital technology has allowed many American firms to expand their products and services in China. The Asian market helps companies from the west to generate a consistent growth rate of 4-5% per annum, sometimes more. That is why localization services have become very marketable in the recent past: If you want to expand in China, you should consider hiring professional translation services to handle all your localization projects, failure to which you could greatly hurt your chances of understanding or impressing your Chinese customers. But then with the growing trade tension, lesser companies will be keen to move to China in the future, which will mean lesser need for translation services. The translation industry in China could really suffer going forward.

Food and Agribusiness

The Chinese government cut off imports of corn, soybeans, nuts, lobster, and other farm products from the US. The American farmers are now struggling to find a market for their produce, which has, in turn, affected their productivity. Tractor manufacturers and farm input sellers are also feeling the pinch. Processed food companies in the US might be forced to lay off workers and close some of their processing plants if things remain as they are.

Tech Sector

Most tech companies in the US have opened shops in China, some of them including NVIDIA Corp. (NVDA) and Intel Corp. (INTC). Chinese tech manufacturers, on the other hand, depend on American semiconductor suppliers to run their businesses. An escalation in the U.S.-China trade war could really hurt tech traders in both countries.

Conclusion

The tension between the U.S. and Chinese officials could end up hurting key industries in both economies. It could be a battle over who will control international trade, but it can easily boil over and become counterproductive. The sad thing is that no one really knows for sure if the tension will rage on or we still are going to witness more draconian tariffs. Only time will tell.